Circuit City woes continue, bankruptcy filing begins

If the story of retail giant Circuit City was a book, Chapter 11 was a section it had certainly hoped would be skipped. Just one short week after news that the retail chain would be closing up shop in 155 of its locations, Circuit City has now announced that it will reorganize under Chapter 11 bankruptcy. Under the protection of Chapter 11, Circuit City should be able to continue paying salaries and providing benefits to its employees as well as honor all current customer programs including returns, exchanges and gift cards. A blurb from James A. Marcum, vice chairman and acting president:

We recently have taken intensive measures to overcome our deteriorating liquidity position. The decision to restructure the business through a Chapter 11 filing should provide us with the opportunity to strengthen our balance sheet, create a more efficient expense structure and ultimately position the company to compete more effectively. In the meantime, our stores remain fully operational, and our associates are focused on consistent and successful execution this holiday season and beyond.

The good news in all of this is that locations not affected by the aforementioned closures will remain open for business during the reorganization, provided the Bankruptcy Court grants Circuit City’s request to remain operational as expected. As the economic struggles in this country continue, we can only hope a Chapter 11 reorg will be successful in stabilizing the retailer’s business and might prevent further layoffs as Circuit City begins a long and difficult climb out of its horrible current financial situation.

Hope it stays afloat because I really dislike best buy! I refuse to spend my cash on merchandise from best buy!!

mingkee

no…..
it’s dying

jvijil

You’d think they would do better than bestbuy since they have lower prices than bb.

JR

CC needs to really do their homework and lower prices. They are consistantly more expensive than Best Buy on everything and then they say they price match. Well I don’t want to go back and forth and prove it so I just go to BB and not deal with it.

They also need to Brighten up their stores and copy what BB does and have an bunch of PS3’s, Xboxes and Wii’s available to play, that always draws in the kids and families.

I will say, at least at my local store is that their customer service has been VERY good which is a 180 from a few years ago.

Evilhomer

High prices are a bane to both CC and BB compared to Fry’s. However, most area’s don’t have a Fry’s or other dicount electronics store, so they are the only choice. However, I find BB to be a better shopping experience than CC. CC is alway at least 5% higher in my area.

Both would benefit greatly though from having really knowledgable employees who really understand the products they are selling. Both stores irritate the hell out of me with the amount of misinformation that they pass on to customers about electronics. Don’t get me wrong. They TRY to be helpful. But outright misinforming customers about products isn’t doing anyone any favors.

Francis

@ jvijil:

Circuit City is notorious for pricing their merchandise higher than the competition in hopes of being seen as high-end. This has not worked for them and as a result we have a Chapter 11 bankruptcy. My local Circuit currently has lower prices, but only because it is one of the 155 stores closing. Lowering prices by up to 50% in order to liquidate your inventory does not constitute lower prices than Best Buy.

Brian

Man, I used to work for Circuit City up until last year, so it’s weird to see them go bankrupt. The main problem I have with both CC and BB is that they both try to sway customers into purchasing accessories; management emphasizes this so much in both stores. But all in all, I have had better experiences buying from BB, despite having worked for Circuit City lol.

NDCart

I’ve always had the opposite experience. My local CC is not closing, and is typically cheaper on there merchandise than BB which is a block away. Sales staff has much more knowledge than BB could ever hope for. Sure hope they pull through this. Competition is good for everyone.

dan

Best buy is ok if you know what you’re doing but joe sixer gets ripped to shreds in there…and it was the same with cc ‘cept best buy has a huge wal marty brightness to it that is atractive to consumers obviously…can’t wait til black friday…reccessions rule.

VD

If CC goes, in time BB prices will go up. Eventually it will be like Russia in this country. 1 place to buy electronics. 1 place to buy toilet paper. Capitalism has it’s good side and bad and we’ve been seeing it’s bad side lately.

Librapaj

I don’t think I have ever seen more than one customer, besides myself, in a CC. It’s sad, but that’s the nature of the beast. Big fish eats the little fish. They will be alright. File for Chapter 11, get reorganized and come back leaner and meaner. Hopefully they learn their lesson. If not we might as well just call it Titanic City because there will be no hope for the sinking ship.

FyreStarrter

Iam deeply saddened by CC’s troubles. In the area where I used to live, they always had the best price & the best service over everybody including BB. In that area they are closing ALL the CC stores which I think is a really bad strategy. Chapter 11 will help them re-org & reinvent. Closing ALL the stores in high population metropolitan areas will NOT.

bluehorseshoe

Funny…CC helped knock out ‘The Wiz’, who knocked out ‘Crazy Eddie’ up in the NY/NJ area and now their getting dinged by BB. It’s a cycle. Who is up next?

Librapaj

Well CC hasn’t gone anywhere….yet. If anything, the next one to go might be BB. You see Tweeter is also going out of business. The only one who might never go out of business is Walmart and that is because they are global.

http://www.thephoenixprinciple.com adam hartung

Remember when Circuit City was a favorite in “Good to Great” by Jim Collins? Remember when we thought being big gave you clout with customers and vendors to produce long-term returns (Michael Porter’s 5 Forces Model)? It’s time we recognize that the old approach to management doesn’t work in a rapidly shifting competitive world. There are winners in today’s market, but they follow a different approach. Read more at http://www.ThePhoenixPrinciple.com

http://www.myspace.com/datechnologyking mr. Hi-Definition

Hopefully this brings some great deals for Black Friday for all. I like Best Buy more anyways…

Mr Hopkins

In my hood CC was always cheaper. I’d take their flyer 2 wally world and get price matching every week. I love CC. Maybe they’ll go online only like office depot.,

paLLEN

I get sad when stores close BUT

I WILL BE SINGING “OH HAPPY DAY” when CC finally shuts down all of the locations…

WORST customer service
Bad prices (unless it is the release week)
NEVER have anything in stock

Hate this place with a passion and I was hoping mine would be one of the closing stores so they can make something useful in it’s place.

http://saleboutique.com/ jmanley

Let’s not lose sight of the fact that Circuit City has been getting hammered for years. Best Buy offers better pricing, selection and service in a physical store and Internet stores offer infinite selection and better prices. This is just another example of a bad company that can’t survive a downturn.